Pension & Benefits NetNews – January 2, 2018

 

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Featured This Week

 

Employee Benefits Management News

 

  • IRS issues additional FAQs on employer credit for paid family and medical leave
  • IRS provides guidance on the determination of the nondeductible portion of parking fringe expenses
  • Federal district court strikes down ACA, but law remains in place for now
  • Nationwide injunction barring religious exemption interim rules for contraceptives ruled improper

Pension Plan Guide News

 

  • PBGC single-employer and multiemployer programs’ financial conditions show improvement
  • IRS provides guidance on 2019 withholding rules affecting retirement and annuity distributions
  • IRS extends tax/reporting transition relief for IRA payments to state’s unclaimed property fund
  • Enrolled retirement plan agent renewal fee to double

 

Employee Benefits Management News

 

IRS issues additional FAQs on employer credit for paid family and medical leave

The IRS has issued additional FAQs regarding the employer credit for paid family and medical leave under Code Sec. 45S. The IRS had previously issued FAQs on the credit in April 2018, and then issued additional guidance in IRS Notice 2018-71 in October 2018. The new FAQs are reflective of that guidance. For details, see ¶2121D.

        (Read Intelliconnect) »

IRS provides guidance on the determination of the nondeductible portion of parking fringe expenses

The IRS has provided guidance and examples for calculating the nondeductible portion of parking expenses. In addition, the IRS has provided guidance to tax-exempt organizations to help such organizations determine how unrelated business taxable income (UBTI) will be increased by the nondeductible amount of such fringe benefit expenses paid or incurred. For more information, see ¶2121E.

        (Read Intelliconnect) »

Federal district court strikes down ACA, but law remains in place for now

The Patient Protection and Affordable Care Act (ACA) is unconstitutional following the repeal of the legislation’s individual mandate penalty under the Tax Cuts and Jobs Act of 2017 (TCJA), a federal district court judge in Texas ruled. For more information, see ¶2121H.

        (Read Intelliconnect) »

Nationwide injunction barring religious exemption interim rules for contraceptives ruled improper

While the U.S. Court of Appeals for the Ninth Circuit affirmed part of the preliminary injunction barring interim rules for the religious and moral exemption to contraceptives under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) in five states, the appeals court found that the district court improperly issued a nationwide injunction. For more information see ¶2121I.

        (Read Intelliconnect) »

Pension Plan Guide News

 

PBGC single-employer and multiemployer programs’ financial conditions show improvement

The Pension Benefit Guaranty Corporation (PBGC) has released its Fiscal Year (FY) 2018 Annual Report, showing that the single-employer insurance program has emerged from a deficit of $10.9 billion at the end of FY 2017 and now has a positive net position of $2.4 billion as of September 30, 2018. The deficit in the PBGC’s insurance program for multiemployer plans has dropped, decreasing to a deficit of $53.9 billion at the end of FY 2018 from a deficit of $65.0 billion at the end of FY 2017. The PBGC says that the improved financial position of the programs primarily due to higher interest rate factors, which reduced the value of the PBGC’s benefit liabilities. “A financially strong pension insurance program that workers and employers can count on is a vital source of retirement security for millions of workers, retirees, and their families,” said PBGC Director Tom Reeder. “The continued improvement in the financial condition of the Single-Employer Insurance Program is a welcome result. The Multiemployer Insurance Program deficit has narrowed, but it clearly won’t keep the program from running out of money. PBGC continues to work with Congress and the multiemployer plan community to preserve the solvency of multiemployer plans and the Multiemployer Program.” For more information, see ¶161v.

        (Read Intelliconnect) »

IRS provides guidance on 2019 withholding rules affecting retirement and annuity distributions

The IRS has provided interim guidance for the 2019 calendar year on income tax withholding from wages and withholding from retirement and annuity distributions. In general, certain 2018 withholding rules provided in IRS Notice 2018-14 will remain in effect for the 2019 calendar year, with one exception. Also, the IRS intends to develop income tax withholding regulations to reflect changes made by the Tax Cuts and Jobs Act (TCJA, P.L. 115-97), as well as other changes in the Code since the regulations were last amended, and certain miscellaneous changes. The payor of certain periodic payments for pensions, annuities, and other deferred income generally must withhold from the payments as if they were wages, unless the individual payee elects not to have withholding apply. Before 2018, if a withholding certificate was not furnished to the payor, the withholding rate was determined by treating the payee as a married individual claiming three withholding exemptions. The TCJA amended this rule so that the withholding rate “shall be determined under rules prescribed by the Secretary.” The IRS has determined that, for 2019, withholding on periodic payments when no withholding certificate is in effect continues to be based on treating the payee as a married individual claiming three withholding allowances. For more information, see ¶17165m.

        (Read Intelliconnect) »

IRS extends tax/reporting transition relief for IRA payments to state’s unclaimed property fund

The IRS has extended the withholding and reporting transition relief provided in situations where an individual retirement account (IRA) trustee pays an individual’s interest in a traditional IRA to a state’s unclaimed property fund. In IRS Rev. Rul. 2018-17, the IRS clarified that income tax withholding requirements and Form 1099-R (Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.) reporting would apply to an IRA trustee’s payment of an individual’s interest in a traditional IRA to a state’s unclaimed property fund, if the payment is required by state law. For more information, see ¶17165k

        (Read Intelliconnect) »

Enrolled retirement plan agent renewal fee to double

The IRS has issued proposed regulations relating to enrolled agent and enrolled retirement plan agent user fees. The IRS is proposing to increase the fees for becoming and renewing as an enrolled agent to $67. The fee for renewing as an enrolled retirement plan agent will also increase to $67. The IRS proposed regulations removed the initial enrollment user fee for enrolled retirement plan agents because the IRS no longer offers initial enrollment as an enrolled retirement plan agent. For more information, see ¶161x.

        (Read Intelliconnect) »

 

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